Fiesta Bowl makes strong case to BCS panel to stay in series

by Craig Harris - Apr. 23, 2011 02:45 PMThe Arizona Republic

CHICAGO - The Fiesta Bowl made a strong case here Saturday to stay in college football's prestigious Bowl Championship Series, hoping that promises to clean up self-disclosed financial mismanagement, potentially illegal conduct and lax board oversight will be enough to keep it in play.

The bowl, during a roughly four-hour private meeting before a seven-member BCS task force, went through the myriad policy changes it has made since the March 29 release of a 276-page report revealing embarrassing problems uncovered during an internal investigation. That same day, it fired longtime Chief Executive John Junker and announced it had accepted the forced resignations of two other top executives.

The task force, which was created in response to the report, made no decision Saturday on the Fiesta Bowl's future in the BCS, but its chairman said he was impressed with the bowl's candor.

The BCS is a consortium of five post-season college football games that is managed by what the NCAA calls 11 Football Bowl Subdivision conferences and the University of Notre Dame.

A final decision could come by mid-May, said Graham Spanier, Pennsylvania State University president and BCS task force chair.

"We had a very comprehensive and candid discussion with the Fiesta Bowl. All of us who are on this review committee are grateful for the time they spent to come here and meet with us," Spanier said. "Personally, I was very impressed with the depth of their presentation, the sincerity of their efforts and the transparency that they brought to this discussion."

Spanier said the group would file a report that would be reviewed by conference commissioners and the BCS' presidential oversight committee. The oversight committee, also chaired by Spanier, will make a final determination on the Fiesta Bowl. He declined to give a specific date when that decision would occur.

Spanier said there was a range of possibilities, including expulsion to staying in the BCS for the Fiesta Bowl. He also said there were "some things in between," but he declined to elaborate.

The BCS could remove the bowl from its organization when the current four-year contract ends after the 2014 games. That would allow other bowls such as the Cotton Bowl in Dallas to move into the BCS mix if college football retains its current post-season system. And that could result in less attractive teams coming to the Valley to play in future Fiesta Bowls.

The Fiesta Bowl brought eight representatives, including Chairman Duane Woods and attorneys Nathan Hochman and Christopher Madel, former federal prosecutors who conducted the bowl's internal investigation. The two sides met at the Big Ten Conference Headquarters near Chicago's O'Hare Airport.

Woods said his group, which included three other board members and a public information officer, felt good about the meeting.

Woods said the Fiesta Bowl was "just as transparent as we could be about how we got here and what we have done to try to fix things" and was very open to work with the BCS to take the right steps.

It is unclear if the BCS has the legal authority to terminate the Fiesta Bowl's contract, which runs for three more years, and whether there is a "morals clause" to punish the bowl. And it is unclear if the BCS can intervene and break the Fiesta Bowl's contract with the Big 12 Conference, which sends its champion to play in the Fiesta Bowl if that school is not playing for a national championship.

Bill Hancock, BCS executive director, has declined to disclose details of the contract between the BCS and Fiesta Bowl, saying such information is confidential. Fiesta Bowl officials would not comment. Hancock, in an interview prior to Saturday's meeting, would not say if the BCS could unwind contracts the Fiesta Bowl has with its sponsors, such as Frito-Lay, or if sponsors would be compensated if the Fiesta Bowl is removed from the BCS.

Hancock was not available Saturday.

'Reveal and reform'

The Fiesta Bowl is using what officials call a "reveal and reform" strategy to convince the task force it should remain in the BCS with the Orange, Sugar and Rose bowls. Being in that exclusive group has allowed the Fiesta Bowl to host a top-tier college football bowl game annually, and the national championship game every four years. Those games have brought deep-pocketed, out-of-town college football fans to the Valley around New Year's Day.

The new strategy is far different than the one Fiesta Bowl officials took for months after The Arizona Republic first reported in December 2009 that current and former employees claimed they were reimbursed for making political campaign contributions, a felony, and that the bowl was spending heavily on lobbyists.

Until last fall, when an employee told Woods the bowl had engaged in a cover up, bowl officials had said there was no credible evidence of wrongdoing, and they defended the spending practices.

The new reform strategy also will be used Thursday, when Fiesta Bowl officials meet in New Orleans with the NCAA's Postseason Bowl Licensing Subcommittee behind closed doors for about an hour. That group has the power to revoke the operating license of the Fiesta Bowl, which also runs the Insight Bowl.

Subcommittee Chairman Nick Carparelli Jr. has said a decision on the Fiesta Bowl would not be made until later this spring. He said the group's decision will rely in part on the BCS task force's report.

With the NCAA working in conjunction with the BCS, it is imperative that the Fiesta Bowl get the blessings of both groups to stay in business.

However, any immediate discipline would likely come from the NCAA, the governing body of college sports. The NCAA's licensing subcommittee has the authority to immediately revoke a bowl's license if a bowl's operations or conduct are so bad that it is deemed "in the best interest of college athletics" to end the NCAA's association with it.

The NCAA also could place the bowl on probation or fine the organization. The NCAA twice has shut down minor bowls because of financial and attendance problems.

Woods said the NCAA meeting will focus on the finances of the Fiesta and Insight bowls, but he said the organization has a good business plan. He said the Fiesta Bowl wants to give more money to charities and "eliminate consulting and legal fees."

Reforms in place

Along with appealing to the BCS and NCAA, the Fiesta Bowl is working with the Internal Revenue Service to keep its non-profit status. As a 501(c)(3) tax-exempt organization, the bowl has a federal exemption from paying corporate income taxes. This exemption also allows non-profit organizations to be exempt from similar state and local taxes, and having that status allows charitable contributions made to the bowl to be tax-deductible.

The IRS, which will not comment on the Fiesta Bowl, may have the same concerns as the BCS and NCAA in that the Fiesta Bowl has acknowledged that employees were reimbursed for making campaign contributions, and employees were reimbursed for questionable expenses like trips to strip clubs and expensive out-of-town junkets. The Arizona Attorney General's Office also is conducting a criminal investigation of the bowl.

Bowl officials, however, say they took swift action to fire Junker after an independent committee had uncovered unethical and possibly illegal conduct, and board members have put sweeping reforms in place to make sure such actions do not occur again.

Changes include:

Giving an audit and compliance committee authority to approve all expenses by bowl executives.

Hiring a chief compliance officer who will make sure reform policies are followed.

Hiring a full-time chief financial officer who will report directly to the board and not the executive director.

Changing the top position from chief executive to executive director and imposing more oversight by the board. The bowl's investigative report showed lax oversight by some previous board members who knew of but did not stop questionable expenses and gained financially from the bowl.

Bowl officials have said they hope their reforms and transparency in disclosing embarrassing behavior will be enough for those who will determine the Fiesta Bowl's future to give the organization a second chance.